This is the question we’ll be debating at today’s pension play pen lunch. I’m a little daunted . I’ve read Professor John Kay‘s excellent paper about how equities work, should work and why they could work better.
He’s in the middle of his work on this important subject and my trepidation’s because I know so little and the subject seems so huge! If you are considering coming this lunchtime and feel a little nonplussed – you are not alone!
The good news is that our friend Mr Stephen Cohen, who knows a lot about all this will be leading the debate.
As ever, the lunch is at the Counting House pub at 50 Cornhill in the City of London. We meet upstairs in the gallery room and you need £15 to pay for food and drink consumed (typically a pie and a pint though salads and orange juices are on the increase).
We kick off at 12am and start our debate at 12.30pm. Everyone is welcome, you don’t have to participate and if you do , you can chose to remain anonymous in subsequent blogs and discussions!
This is what John Kay has to say in the introduction to his paper (you can read the whole paper on this link)
Equity markets are a principal means by which savers can contribute to, and share in, the success of British business. Many people who know nothing of the stock exchange participate in equity markets through their pension funds and other vehicles of long term investment.
Most of the respondents to our consultation – including many from within the financial services sector – felt that these fundamental objectives of rewarding savers through the activities of high performing companies could be more effectively achieved. While the growth of financial intermediation has many positive aspects, intermediation is not an end in itself, and the rewards of intermediation can ultimately be justified only by the contribution such activity makes to economic activity outside the financial sector. Markets exist to serve customers.
The proposals for reform we have received bear on many different areas of policy – such as the governance of companies, the ways in which economic activities are measured, the functioning of markets and the structure of the savings market.
I hope that if you read this before mid-day on Monday April 2nd 2012 and are in the City this lunchtime- you’ll be able to attend